Travel, Shipping Junk Bonds Decline Amid Coronavirus Worries
2020-01-30

By Laura Benitez and Marianna Aragao
(Bloomberg) — CMA CGM’s bonds fell 2 cents on the euro on
Thursday as investors grapple with the potential impact of the
coronavirus outbreak on the container shipping firm amid renewed
pressure on the industry’s profitability.
* The firm’s EU750m of bonds due January 2025 declined 4 cents
on the euro so far this week to 79.3 cents, according to CBBT
prices
* In a note to clients earlier this week, BofA analysts said
that the outbreak may cause disruption to China’s manufacturing
and shipping industry given that Wuhan, the epicenter of the
virus, is a significant transportation hub in the country
** Freight rate and bunker price data indicate profitability may
have worsened and continue to point to lower earnings: analysts
* Companies in travel, automotive and aviation or with
significant exposure to Chinese markets are also under pressure
** Bonds from travel retailer Dufry, hotel chain Accor and air
cargo handler WFS declined on Thursday
* There’s “obvious” risk for airlines, shipping and traveling,
Benjamin Sabahi, head of credit research at Spread Research
said, although it’s “early at this stage to assess the impact”
** Auto companies are very exposed to China in terms of
production, he said
* Auto parts maker Adient’s 8/24 notes dropped 1.2 point today
to 92; the company will announce results on Friday
–With assistance from Irene García Pérez.